Pakistan E&Ps_The looming risk
Recent bourse filings regarding the unilateral amendment of supplemental agreement (SA) and the resultant implementation of windfall levy have added to the list of uncertainties that linger on in the E&P sector (pertaining to gas pricing). While the issue relates to all those licenses awarded on PP94/97 and whose operators have signed supplemental agreements to convert to PP12, the most talked about concession remains TAL block, where revised gas prices had been issued back in Oct'17. Our understanding of the subject matter suggests that there could be 2 most likely outcomes of the matter being challenged in the court: 1) imposition of windfall levy prospectively along with higher gas prices (trimming annualized EPS of OGDC/PPL/POL by PkR0.25/0.56/2.11) or 2) the petitioners deciding to revert back to older policy (PP97) with PP01 applicable prices (shaving off annualized EPS of OGDC/PPL/POL by PkR0.22/0.57/5.09) in case the levy is imposed retrospectively. Apart from this, PPIS reported updated reserves for Dec'17, which includes asset size for POL's recent discovery of Jhandial well at 23.99mnbbls and 292.1BCF gas. With intl. oil prices still averaging above its 2.5 year high and a host of exploration activities being conducted, we believe news flows on these fronts will drive the sectors' performance going forward.
Oil and Gas Development Company is a petroleum exploration and production (E&P) company in the Pakistan oil and gas sector. Co.'s principal activity is to explore, develop, produce and sell oil and gas resources and related activities. Co. also manufactures Gas, Liquefied Petroleum Gas, Crude Oil, and Sulphur. Co.'s major fields contributing in the aforesaid production of crude oil include Nashpa, Kunnar/KPD, Pasakhi, Sinjhoro and Rajian and for gas include Qadirpur, Uch, KPD, Nashpa and Dakhni. Co. carries out exploration and development activities on its own as well as in joint ventures with other oil companies.
Pakistan Petroleum Limited (PPL) is a supplier of natural gas. The Company is principally engaged in conducting exploration, prospecting, development and production of oil and natural gas resources. The Company operates nine producing fields, which include Sui, Kandhkot, Adhi, Mazarani, Chachar, Adam, Adam West, Shahdadpur and Shahdadpur West. It has working interests in approximately 20 partner-operated producing fields. Its partner-operated fields include Qadirpur Gas Field, Tal Block, Miano Gas Field and Sawan Gas Field. The Company, along with its subsidiaries, has a portfolio of approximately 40 exploration blocks, of which over 20 are operated by the Company, including Block-8 in Iraq, while approximately 20 blocks consisting of three offshore leases in Pakistan and two onshore concessions in Yemen are operated by joint venture partners. Its gas production from its operated and partner-operated fields is approximately one billion cubic feet of gas per day.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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